EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800529
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Advanced Pump Technologies Pty Ltd applied for a TCO in respect of certain pipe vinyl ester resin on 09 January 2008.
Instrument
TCO No 0800529 was made on 25 March 2008. It declares that those certain pipe vinyl ester resins are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 10%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0800529 is taken to have come into force on 09 January 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Parliament of Australia to provide a framework for the administration of customs duties and to facilitate the regulation of imports and exports. One of the provisions within the Act, specifically under Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was introduced to address the problem of providing tariff concessions on certain imported goods where Australian production of substitutable goods does not occur in the ordinary course of business. The objective of this legislative provision is to support Australian industries by allowing them to import certain goods at a lower rate of customs duty when no suitable domestic alternatives exist. This encourages economic efficiency and competitive pricing in the market.
The Tariff Concession Instrument No. 0800529, made in 2008, exemplifies the application of this scheme. In this instance, Advanced Pump Technologies Pty Ltd successfully applied for a TCO concerning certain pipe vinyl ester resins, resulting in a tariff concession that lowered the duty on these goods from the general rate of 10% to free. This legislative and administrative process ensures that Australian businesses can compete effectively by accessing necessary imported goods at reduced costs, thereby supporting broader economic objectives. The enactment of such instruments adheres to the policy of providing targeted tariff relief while maintaining the integrity of the customs duty system.
Scope and Application
The Tariff Concession Instrument No. 0800529 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods entering Australia. This instrument is particularly relevant to businesses or individuals importing certain pipe vinyl ester resins, as it provides a mechanism to lower the customs duty on these goods from the general rate of 10% to free, provided that no substitutable goods are produced in Australia. The scope of this legislation encompasses any entity that imports the specified goods and seeks to benefit from the reduced tariff rate. The instrument's jurisdictional reach is governed by the Commonwealth, thereby extending its application nationally across Australia. While the Act does not explicitly outline exclusions or exemptions within the instrument itself, it refers to broader provisions in section 269SJ of the Customs Act 1901, which excludes certain goods from being subject to tariff concession orders. The application of the Tariff Concession Order can be extended or modified through subordinate instruments, allowing for flexibility in addressing specific industry needs or changes in market conditions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0800529, under the Customs Act 1901, concern the establishment of a Tariff Concession Order (TCO) for specific pipe vinyl ester resins. Section 269C (1) stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Once the CEO is satisfied that the application meets the core criteria, as per section 269P (3), they must make a written order (a TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, certain pipe vinyl ester resins are declared to be subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 10%.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and approval process for a TCO. The applicant, in this case, Advanced Pump Technologies Pty Ltd, must ensure that their application complies with the core criteria, particularly the condition that no substitutable goods were produced in Australia in the ordinary course of business. The CEO is obliged to review the application and, if satisfied that it meets the criteria, to issue a TCO. Additionally, the CEO must, as per section 269K(1), publish a notice in the Gazette inviting submissions from any interested parties. In this instance, the CEO did not receive any submissions.
In terms of breaches, penalties, or consequences, the Act does not explicitly state penalties for failing to comply with the TCO process. However, if an entity fails to adhere to the conditions set forth in the TCO, or if the CEO determines that the application did not meet the core criteria upon further review, the entity could face civil or criminal consequences. The Customs Act 1901 and associated regulations outline various offences and penalties for breaches of customs laws, including fines and imprisonment. It is important to note that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration and does not impose any liabilities on any person.